Spouses share a lot, but no matter your relationship status, your credit score belongs to you and you alone. Even if you are 100% supported financially by your spouse or partner, establishing and building your own credit score is essential.
It can benefit you both as you navigate financial decisions together. But should you divorce or your spouse die, having good or excellent credit can help you as you begin to make financial decisions on your own.
"A household's financial dependence on one income earner can foster unhealthy relationship control dynamics," said Katherine Fox, a certified financial planner, in an email. "Stay-at-home spouses who take steps to protect their credit score and financial literacy are doing their part to maintain a healthy money attitude and dynamic within their relationship."
Any time you and your spouse apply for a joint loan, such as a mortgage, both of your credit scores are evaluated by the lender. Lenders may use the person's score that falls on the lower end to determine your eligibility. Ideally, even the lowest score between you both is still in good shape because this can affect what loan terms, like interest rates, you would qualify for together. A lower credit score can make borrowing money more expensive.
Your credit score also comes into play when you apply for a credit card in your own name, which you can do even if you don't earn an income. So long as you are 21 or older, you can include your spouse's income on the card application.
"Having a solid foundation will help you if you end up alone and need capital to get started," says Brittany Davis, an accredited financial counselor and a registered investment adviser. "I know some people are leery of credit and debt, but there are so many things credit can be used for."
Davis likens credit access to insurance — it's something that's good to have, whether or not you need it at the moment.
Besides applying for your own credit card using your spouse's income in your application, there are other ways to build your credit.
You can become an authorized user on your spouse's credit card. They would be responsible for making payments, but if they pay on time each month and you both avoid charging more than 30% of the credit limit, over time this can build your credit score.
"At the very least, stay-at-home spouses should be a joint account holder or added to their partner's credit card to help them build and maintain their own credit score," Fox says.
Be sure to also pay other household bills on time, including utility bills and rent payments. In some cases, those are also reported to credit bureaus.
Though you each have your own credit scores, your money habits can help or hurt each other, particularly when you have joint loans or share credit cards.
As a credit card authorized user, you are at the mercy of the primary cardholder's behaviors. If your spouse makes late payments, that can negatively impact your credit. You will want to set a budget with each other, because when more than one person uses the same card, it's that much easier to overspend.
Where you live can also be a factor in how you can each affect each other. According to Fox, in community-property states, you are generally not responsible for any debts your spouse took on before you got married, but you are responsible for each other's debts after marriage. But in non-community property states, you only share responsibility for joint accounts and debts.
And if you are the income earner, proceed with caution before co-signing a loan for your nonworking spouse or any other loved one.
